TIRANA, Dec. 1 – Retail sales in the third quarter of this year registered a slight improvement compared with the previous quarter but continued dropping compared to the same period in 2009. INSTAT data show the volume of retail sales in July-September 2010 dropped by 0.6 percent year-on-year but increased 2.7 percent compared to the second quarter. Statistics made available by INSTAT show the deteriorated situation in the retail market compared to the third quarter of 2009 was mainly a result of a considerable drop in the purchasing power reflecting the consumers’ saving trends even for basic articles such as food and drinks, but also household appliances, footwear and clothing.
Interestingly enough, the sale and repair of cars and motorcycles and the retail sale of fuel continued growing in the third quarter both quarterly and year-on-year. Retail sales of cars and their repair rose 4.7 percent on the year while retail fuel sales increased 15.9 percent year-on-year and 9.4 percent compared to the second quarter of 2010.
A sharp increase was also registered in the sale of books, newspapers in specialized stores, with their index almost twice higher compared to the third quarter of 2009.
INSTAT data show the employment index in retail trade during the third quarter fell 1 percent year-on year. Meanwhile, employment rates at the ‘car trade and repair’ group rose 4 percent.
Albania’s retail sector, dominated by small stores, shrank 2.5 percent year-on-year in the second quarter of 2010, reflecting the poor consumer confidence. Employment in the retail sector dropped by 4.8 percent compared to the second quarter of 2009.
During the first quarter of 2010, the retail sale index increased by 5.7 percent year-on-year but dropped by 7.8 percent compared to the last quarter of 2009.
A recent study by US-based management consulting firm A.T. Kearney has described Albania as a small market with a positive outlook.
“Albania debuts in the Global Retail Development Index (GRDI) in the 12th place driven mainly by its unsaturated market. Albania is still relatively poor with a per capita GDP of about 3,370 dollars; by 2014 real GDP is expected to grow by 30 percent which makes it a country to watch in the longer term,” said the report.
So far, the fragmented food retail market is shaped by mostly small independent shops and open markets of self-grown products. The top three grocery retailers together operate fewer than 30 stores, added the report.
Albania’s market attractiveness was rated at 30.4 percent, country risk at 30.2 percent, market saturation 82.2 percent, and time pressure at 61.7 percent with a total GRDI of 51.1 points out of a maximum of 100.
The 30-country list was headed by China with Guatemala at the bottom, according to the 9th annual Global Retail Development Index study from management consulting firm A.T. Kearney.
Consumer Confidence
The central bank rated the Albanian consumers’ situation as favourable in the third quarter of this year despite a slight decrease. A survey carried out last month showed the consumer confidence index dropped by 1.7 percentage points in the July-September period but continued standing at 3.9 percent above its historical average. The situation was a result of increased pessimism on the current financial situation of households, the expected economic situation and the financial situation in general. Big purchases, whose balance registered a 1.3 percentage point improvement, was described as insufficient to contribute to the overall improvement in the consumers’ optimism.
Consumers, who said the cost of living increased compared to the second quarter, expect the unemployment rate to increase during the remaining of 2010. “Some 38.9 percent of consumers expect the unemployment rate to increase compared to only 18.9 percent who are optimistic,” said the survey.
The vast majority of 77 percent of consumers expect the inflation rate after one year to remain within the central bank’s target of 3ѱ percent.
The situation appears more pessimistic for businesses with the crisis-hit construction sector leading the confidence drop and only the service sector appearing more optimistic.
